How the American people would fix Social Security

Supposedly the public's inability to face the realities of Social Security makes it a 'third rail' for Congress. But when a recent survey presented Democratic and Republican voters with policy options, the majority clearly agreed on solutions to end the Social Security shortfall.

The Social Security Administration's main campus in Woodlawn, Md. is pictured here in Jan. 11. 2013. Op-ed contributor Steve Kull writes: 'When people are asked whether they favor cutting Social Security benefits or favor raising the payroll tax rate, majorities often say they would rather not do either. But this does not mean that Americans are not capable of...dealing with the problem. They just need to be given the right tools.'

Patrick Semansky/AP/File

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For some time now it has been known that America's Social Security program is in trouble. According to the Social Security trustees, if no steps are taken, its trust fund will be exhausted in 2033, and after that the program will only be able to deliver benefits based on current receipts. This would result in a benefit cut of 23 percent – a significant impact on Americans planning for their retirement. Despite these stern warnings, Congress seems incapable of taking action.

The story tends to be that division in the public drives the gridlock in Congress on this issue, or that the public is so psychologically immature that it cannot deal with difficult trade-offs. Supposedly the public's inability to face the realities of Social Security makes it a "third rail" that will harm any congressional leader who seeks to address it.

Standard polls contribute to this impression. When people are asked whether they favor cutting Social Security benefits or favor raising the payroll tax rate, majorities often say they would rather not do either. But this does not mean that Americans are not capable of going beyond off-the-cuff responses and dealing with the problem. They just need to be given the right tools.

A groundbreaking study

In a new study by the Program for Public Consultation, affiliated with the University of Maryland, a representative sample of 738 Americans went through a process in which they were given the opportunity to learn about the Social Security issue and seriously think through the options for dealing with the shortfall.

Guess what? Three-quarters of Republicans and Democrats agreed on steps that would eliminate most of the Social Security shortfall.

The process they went through simulates the one a policymaker goes through. (Try this "policy simulation" yourself at vop.org/consultations.) The content was developed in close consultation with top Republican and Democratic congressional staffers who specialize in Social Security, as well as various groups across the political spectrum, ensuring that the presentation of information was accurate and balanced.

Working online, respondents were first briefed about the problem of the projected Social Security shortfall and how it results in large part from two key facts: retirees are living longer and the number of retirees is growing much faster than the number of workers.

Participants were then presented with options for dealing with the problem and told how much each one would lessen the projected shortfall, according to the Social Security actuary. They were told how each would impact the shortfall, and they then evaluated strongly stated arguments for and against each one. Finally, they went through a process of selecting their own package of options.

No third rail here

So what happened? Large majorities endorsed reducing benefits for the top quarter of earners (79 percent), raising the full retirement age to 68 (78 percent), raising the cap on income subject to the payroll tax to $215,000 (83 percent), and raising the payroll tax rate from 6.2 percent to 6.6 percent (75 percent). All of these steps were endorsed by at least 75 percent of both Republicans and Democrats.

According to the Social Security trustees, these four steps would eliminate more than 70 percent of the Social Security shortfall.

In addition, a more modest majority of 52 percent endorsed a further step of making all income subject to the payroll tax (including 53 percent of Republicans, 58 percent of Democrats, and 40 percent of independents). Together with the other steps that received broad public support, this would more than completely eliminate the Social Security shortfall.

Interestingly, it appears that Americans do not simply think about what will be in their own interest, but rather what is needed for the common good. For example, those with higher incomes were just as likely to favor raising the cap on taxable income, even though it would increase their taxes, as those with lower incomes whose taxes would not be affected. People under the age of 48 were just as likely to favor raising the retirement age, even though it would affect them, as older people whose retirement age would not be affected.

Congress can consult 'the sense of the people'

The study was sponsored by Voice Of the People, which seeks to give informed public opinion a greater voice, and was a model of the "Citizen Cabinet" approach VOP has proposed. The Citizen Cabinet would consist of a large standing panel with a representative sample of Americans who would go through policymaking simulations on current issues Congress is facing. And the Citizen Cabinet will be large enough so that every member of Congress will get guidance from a representative sample of their own constituents.

As these results show, this model has great potential to bring what the Founders called "the sense of the people" to bear on the decisions Congress makes. Rather than holding Congress back from making difficult decisions, an informed public may actually help lead the way.

Steven Kull is president and founder of Voice Of the People and director of the Program for Public Consultation affiliated with the School of Public Policy at the University of Maryland.

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